Shares of diagnostics maker IDEXX Laboratories ($IDXX) soared nearly 14% to over $106 on August 2, after the Maine-based company announced that revenues in its second quarter rose 13% year-over-year to $466.6 million. The company, which derives most of its sales from diagnostic systems that help veterinarians rapidly spot health conditions in dogs and cats, reported that its net income jumped 23% to $67.2 million (74 cents per share).
One of the highlights during the quarter, said IDEXX CEO Jonathan Ayers in the earnings press release, was the launch of SediVue Dx, a urine-analysis system. The company sold 467 units of the new product, it said. That helped IDEXX surpass the average analyst sales and EPS estimates of $446.1 million and 62 cents respectively, according to Zacks.
As a result of the stronger-than-expected performance, IDEXX raised its full-year sales estimate by $25 million, to $1.76 billion to $1.78 billion. It told analysts to expect the EPS range for the year to come in somewhere between $2.32 and $2.39.
During a conference call with analysts after the earnings report was released, Ayers said the international rollout of SediVue would begin in the fourth quarter of this year, with the bulk of the overseas sales effort occurring in 2017. IDEXX will also introduce an upgrade of its software for SNAP Pro, a mobile device that syncs with the company’s SNAP line of diagnostic tests for dogs and cats and that allow veterinarians to share results with clients.
Diagnostics is a hot pursuit in animal health, but few companies have been able to keep up with IDEXX. In July, its chief rival, Abaxis, missed sales and earnings estimates, as the company’s executives admitted they had not done a good enough job keeping up with the demand for complementary products, such as software that would allow veterinarians to access diagnostic data directly through their practice-management systems.
IDEXX, by contrast, continues to enjoy strong demand for its suite of products. The company made its debut at No. 7 on Fierce’s recent list of the top 10 animal health companies of 2015, thanks largely to strong demand for Catalyst One, its machine that screens blood samples from dogs and cats and can detect up to 30 diseases in 8 minutes. IDEXX also recently introduced a test that uses a kidney biomarker called SDMA to spot early signs of kidney disease in pets.
During the call, Ayers said that IDEXX plans to add the SDMA offering to Catalyst One late next year. That will allow customers who don’t currently use the company’s reference lab services to perform the test. “We think SDMA expands the opportunity and the value of chemistry testing overall,” he told analysts. “It’s a market-expansion opportunity.”
Special report – IDEXX Laboratories – Top 10 animal health companies